Australian first trial shows wind can provide energy security

An Australian first trial is taking wind farms from passive producers that sell all their output in a slab to more active, and opportunistic, participants in the energy market.

Neoen Australia’s South Australian Hornsdale 2 wind farm has carried out a trial which could see wind replace coal, gas and even pumped hydro in providing energy stability.

The combination of renewables plus storage at Hornsdale is changing Australia's energy market.Credit:Tesla

Under current market conditions, the Australian Energy Market Operator sets a generation target every five minutes to meet demand, which larger power companies try to meet.

Occasionally, they are slightly below these targets which means the system falls out of balance and then gas or pumped hydro steps in quickly to make up the difference.

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These intervention generators are known as Frequency Control Ancillary Services (FCAS).

The success of these trials means that wind farms - which have historically sold off most of their energy output through offtake or power purchase agreements - can now act as FCAS and actively sell their energy into the market when it is needed, potentially replacing gas.

Melbourne University Climate and Energy College energy advisor Simon Holmes a Court said this trial has demonstrated that Australian turbines can move from passive generators to active participants in the National Electricity Market.

"This is a big technical milestone for Australia, this is [something] that people thought renewables weren’t able to bring to the market," Mr Holmes a Court told Fairfax Media.

"The things that people thought were holding renewables back are no longer an impediment now."

FCAS generators are used by the Australian Energy Market Operator to provide stable frequency of electricity delivery into the NEM, maintaining the balance between generation and demand; if there is not enough supply for demand a blackout occurs, but if there is too much supply then the system will shut down to protect the equipment, causing a blackout.

Dylan McConnell, from Melbourne University Climate and Energy College, said the new trials means wind power can now replace some of the control services traditionally provided by thermal generation such as coal, gas, and pumped hydro storage.

Wind farms have now proved they can play a more active role in the NEM.Credit:Bill Clark

Neoen Australia's 24-hour control centre dispatched the wind farm's energy into the FCAS markets under a wide range of operating conditions.

"The FCAS delivered from Hornsdale has already proved its impact on the market," Neoen Australia managing director Franck Woitiez said.

"On the 14th of January, when FCAS Regulation prices were forecast to reach $9000 per megawatt hour – compared to the typical $20 per MWh – Neoen bid additional capacity into the market from both Hornsdale 2 and the Hornsdale Power Reserve (which comprises the Tesla battery installation). This brought the price down to below $300 for the duration of the interconnector maintenance.

"During this time, the South Australian market saw an approximate saving of $3.1 million due to this increased competition. It’s a great initiative for the nation, for companies and for Australian pockets."

Neoen stated that this initiative provides an economically viable and sustainable model for the Australian energy system.

Mr Woitiez told Fairfax Media this trial helps to change the conversation on energy in Australia.

"The arguments against coal or gas are probably more numerous than against renewables now," he said.

"The results of the trial demonstrates that new technologies, clean and competitive, can provide enhanced and reliable services to Australia’s ageing grid."

Neoen’s success at Hornsdale comes as similar trials are being carried in Tasmania at the Musselroe project.